Autonation, Inc. · NYSE:AN
Autonation — Q2 2024 Earnings Presentation
18 slides from Autonation's earnings presentation, Jul 31, 2024
Slide 1: Second Quarter 2024 Earnings Release
Second Quarter 2024 Earnings Release July 31, 2024 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be dee
Slide 3: 2Q 2024 Overview
2Q 2024 Overview TOTAL STORE PERFORMANCE COMMENTS New Vehicle units - 2% • New PVRs stabilizing, $220 sequential decline from 1Q Used Vehicle units - 5% • Used PVRs recovering, $165 sequential increase • Continued solid CFS performance Customer Financial Services #1 • After-Sales margin 48% up 60 bp
Slide 4: Financial Summary
2Q 2024 Financial Summary ($ in millions, except per share data) Q2 2023 Q2 2024 YoY COMMENTS Total Revenue $6,890 $6,480 -6% Lower New / Used ASPs and volume Gross Profit $1,335 $1,163 -13% Decreased 3% sequentially Adj. SG&A Expense $822 $782 -5% Stable sequential run-rate Adj. Operating Income $4
Slide 5: New Vehicles
2Q 2024 New Vehicles RETAIL UNITS & PVR NOTES 62,444 61,268 • Imports increased 6%, Domestic down 5%, Premium Luxury down 10% • April – May units up ~5% YoY • Strong demand for hybrids continues • PVR sequentially stabilizing: $3,108 $4,607 • 4Q 23 – $3,653 – ($372 or 9%) • 1Q 24 – $3,328 – ($325 or
Slide 6: Used Vehicles
2Q 2024 Used Vehicles RETAIL UNITS & PVR NOTES 68,812 65,504 • April – May units ~flat YoY • Gross PVRs up $165 sequentially: $1,638 • Execution on sourcing and pricing $1,870 • Stabilizing vehicle value trends • Lower priced vehicles continue to outperform 2Q 23 2Q 24 Retail Units Gross Profit PVR
Slide 7: Customer Financial Services
2Q 2024 Customer Financial Services GROSS PROFIT ($M) & GROSS PROFIT PVR NOTES $370M $324M • Strong CFS performance continues • Continued growth of AN Finance, superior $2,556 long-term shareholder value $2,815 • PVR reflects: • Robust product attachment, finance penetration for new vehicles • Shift
Slide 8: After Sales
2Q 2024 After Sales REVENUE ($M) & GROSS MARGIN (%) NOTES $1,145M $1,117M • April – May growth similar to 1Q 2024 48.0% • Gross Margin % continues to increase • Value per repair order improving 47.4% • Favorable mix to higher margin categories • Technician productivity 2Q 23 2Q 24 8
Slide 9: Free Cash Flow
1H 2024 Free Cash Flow ADJ FCF ($M) & CONVERSION % NOTES $530M $519M 147.0% • Continued attractive cash conversion profile • Remain focused on cycle times (e.g. billing, time-to-auction, and service WIP) • Timing of payments affected by CDK outage 92.0% • Capital investments slightly below prior yea
Slide 10: Capital Allocation
1H 2024 Capital Allocation CAPITAL ALLOCATION ($M) NOTES 1H 23 1H 24 Capital Expenditures $199 $181 • Continued strong cash conversion provides optionality Debt Repayment (Borrowing)* (415) 15 • CapEx on pace for ~$300 million FY • Focused on integration and optimization of M&A 269 - franchise / sto
Slide 11: Commentary: Encouraged by Health of Markets – Anticipate Strong 2H 24
2Q 2024 Commentary • Operations were on track for strong performance prior to the CDK outage • New and Used unit sales were increasing with margin trends improving • After-Sales growth was strong, margins increasing • Operational continuity now restored • Strong cash flow generation continues • Prud
Slide 12: AutoNation
2Q 2024 AutoNation Solid operating results in a challenging environment Strong cash conversion and attractive capital deployment Continuing to invest for growth including processes and technology as well as CapEx Experienced AutoNation team focused on delivering shareholder returns 12
Slide 13: Appendix
Appendix This presentation contains certain non-GAAP financial measures as defined under SEC rules, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures.
Slide 14: Global Financial Crisis to 2024
SELECT HISTORICAL DATA Global Financial Crisis to 2024 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1H 24* FY Avg. SAAR (mm) 13.1 10.3 11.5 12.6 14.3 15.4 16.4 17.4 17.5 17.1 17.2 17.0 14.5 14.9 13.7 15.6 15.6 14.9 New Retail SAAR (mm) 10.6 8.6 9.2 10.3 11.7 12.8 1
Slide 15: Balance Sheet and Other Items
2Q 2024 Balance Sheet and Other Items ($ in millions) Balance Sheet and Other Highlights 6/30/23 12/31/23 6/30/24 Cash and cash equivalents $63.7 $60.8 $85.9 Inventory $2,572.5 $3,033.4 $3,553.9 Floorplan notes payable $2,581.5 $3,382.4 $3,959.8 Non-recourse debt $262.2 $258.4 $488.3 Non-vehicle deb
Slide 16: Comparable Basis Reconciliations
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations Three Months Ended June 30, 2023, and June 30, 2024 Income from Continuing Diluted Earnings Per Operating Income Operations Before Income Tax Provision(1) Effective Tax Rate Net Income Share(2) Income Taxes 2023 2024 2023 2024 2023 2024 2023
Slide 17: Comparable Basis Reconciliations
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations Six Months Ended June 30, 2023, and June 30, 2024 Income from Continuing Diluted Earnings Per Operating Income Operations Before Income Tax Provision(1) Effective Tax Rate Net Income Share(2) Income Taxes 2023 2024 2023 2024 2023 2024 2023 20
Slide 18: Free Cash Flow Reconciliation
2Q 2024 Free Cash Flow Reconciliation ($ in millions) Free Cash Flow Reconciliation YTD YTD 6/30/23 6/30/24 Net cash provided by operating activities $507.0 $234.9 Net Proceeds from 171.4 94.8 Vehicle Floorplan – non-Trade Increase in Auto loans receivable, net 50.1 370.6 Adj. cash provided by opera